It’s a well-known fact that businesses sometimes face lawsuits from
competitors and customers. But what about when your own employees sue?
There are a number of reasons this may occur. For example, a staffer or job
applicant may allege discrimination. Or an employee may sue you for
occupational injuries if you lack
workers’ compensation insurance
to cover medical bills.

According to the
Hiscox Guide to Employee Lawsuits, U.S. companies faced a 10.5 percent chance of an employee lawsuit in
2016. This figure pertains to lawsuits brought on the basis of
discrimination. The primary solution is to make sure you avoid
discriminating against current and prospective employees based on:

● Age

● Disability

● Unequal pay

● Harassment

● Pregnancy

● Race

● Religion

● Gender

● And more

The responsibility of upholding non-discriminatory practices often falls on
leadership and HR teams. Make sure these departments know discrimination
rules inside and out to avoid a misstep. You’ll also want to actively
foster a company culture known for inclusion, boundaries, and fairness.
Employee lawsuits have the capacity to damage your reputation. Plus,
they’re often time-consuming and expensive.

As the Insurance Journal reports, these claims typically take
318 days
to resolve. Furthermore, without the proper business insurance behind them,
companies pay an average of $160k to defend themselves and reach a
settlement.

Employment practices disputes are not the only form of potential employee
lawsuits. Companies lacking workers’ compensation may face lawsuits over
workplace conditions in the aftermath of an employee injury or illness. As
Nolo advises, “If your employer does not carry workers’ compensation insurance, you
might be able to sue your employer in civil court.” Furthermore, employees
can typically sue employers for personal injury if they’re injured as a
result of deliberate conduct.

It’s in your best interest as an employer to ensure safe workplace
conditions for your team. This means eliminating hazards, conducting
training, and accommodating employees’ needs. Something as simple as
poor housekeeping
can lead to an unfortunate injury, which opens up your business to
lawsuits. Make sure your commercial space is uncluttered, sanitary, and
free of tripping hazards. If liquid spills, clean it up immediately. Put a
slip-proof mat down inside the door for snowy and rainy days. Store
supplies on stable shelving. Reducing hazards ahead of time can eliminate
workplace accidents.

Why is it so important to have adequate workers’ compensation insurance?
Because if an employee does
sustain an injury on the job
, it covers medical bills, rehabilitation costs, and lost wages. In the
same turn, it also protects your company from facing a lawsuit over
workplace conditions. Without this vital coverage, you could pay out of
pocket for any incidents that occur.

Plus, most states require some level of coverage. Even small business
owners should understand
state requirements
so they operate in compliance.

Employee lawsuits tend to be expensive, time-consuming, and bad for morale.
Minimize your risk of facing one by engaging in non-discriminatory
practices and carrying workers’ compensation coverage.